Wingless (Wg)/Wnt signaling is essential for patterning invertebrate and vertebrate embryos, and inappropriate Wnt activity is associated with a variety of human cancers. Despite intensive study, Wnt pathway mechanisms are not fully understood. We have discovered a new mechanism for regulating the Wnt pathway: activity of a Rho guanine nucleotide exchange factor (GEF) encoded by pebble (pbl) in Drosophila and ECT2 in humans. This RhoGEF has an essential role in cytokinesis, but also plays an unexpected, conserved role in inhibiting Wg/Wnt activity. Loss and gain of pbl function in Drosophila embryos cause pattern defects that indicate altered Wg activity. Both Pbl and ECT2 repress Wg/Wnt target gene expression in cultured Drosophila and human cells. The GEF activity is required for Wnt regulation, whereas other protein domains important for cytokinesis are not. Unlike most negative regulators of Wnt activity, Pbl/ECT2 functions downstream of Armadillo (Arm)/beta-catenin stabilization. Our results indicate GTPase regulation at a novel point in Wg/Wnt signal transduction, and provide new insight into the categorization of ECT2 as a human proto-oncogene.